Thai Air’s Fired CEO Says Profit Goal ‘Easily’ Achievable

June 1 (Bloomberg) -- Thai Airways International Pcl’s
outgoing chief executive officer said the carrier may “easily”
achieve this year’s 6 billion-baht ($188 million) profit target,
after the company fired him saying communication problems were
hampering efforts to meet the goal.

Passenger traffic is increasing and June forward bookings
are better than a year earlier, Piyasvasti Amranand, who will
leave the airline after June 21, said in a Bloomberg Television
interview in Bangkok yesterday. Gains from fuel hedging may also
reach $8 million a month at current prices, he said.

Piyasvasti is sticking to the goal after Acting President
Chokchai Panyayong said May 25 the carrier may not meet the
profit target. The board of Thailand’s biggest airline cited a
breakdown in communications with the CEO for terminating his
contract last week after almost three years.

“Strategies like capital raising, equity increase, funding
for new aircraft, all these measures have been implemented
during my 2 years and 7 months at Thai Airways,” Piyasvasti
said. “If I couldn’t communicate, then there was no way I would
have been able to push through all these measures.”

Piyasvasti oversaw a fleet modernization and cost cuts in
2009 that helped Thai Air rebound from its largest ever loss the
year before to a record profit in 2010. The carrier slipped to
another loss in 2011 as fuel expenses jumped.

New Planes

Thai Air’s board approved a plan in June last year to
acquire 37 new planes by 2017 at a cost of 118.6 billion baht.
The company has 87 billion baht of debt, including 54.8 billion
baht in loans due between 2014 and 2018, according to data
compiled by Bloomberg.

Thai Air fell 0.5 percent to 21.5 baht at close of trading
in Bangkok yesterday. The stock has gained 7.5 percent this year
compared with an 11 percent gain for the benchmark SET Index.

Piyasvasti’s removal comes a month after state-controlled
PTT Exploration & Production Pcl replaced its CEO amid a
management reshuffle at parent company PTT Pcl. Both Thai Air
and PTT are 51 percent-owned by Thailand’s Ministry of Finance.

The decision to dismiss him could have come from “the top
of the political spectrum,” Piyasvasti said. “That is
something which I would like the board to shed the light on.”

Prime Minister Yingluck Shinawatra and Finance Minister
Kittiratt Na-Ranong have said there wasn’t any political
interference in the airline’s decision. The company has formed a
committee that will take as long as three months to identify a
permanent CEO candidate.

Advanced Bookings

Thai Air has filled about 72 percent of seats in May as
passenger traffic gained 17 percent from a year earlier,
Piyasvasti said. Advanced bookings indicate that as much as 75
percent of the seats may be filled in June, he said.

The increase in passenger traffic was helped by the
carrier’s strategy last year to shift capacity to Asia from
Europe, where demand was slowing because of the debt crisis,
Piyasvasti said. Demand is also rising on its medium-haul
flights, especially to South Korea and Japan, he said.

The carrier is also trying to win market share at home with
its new Thai Smile unit, which will start operations on July 7
with flights to Macau. It will also service Thai destinations
including Krabi, Surat Thani, Chiang Mai and Phuket.

Thai Smile, which will have a fleet of 11 Airbus SAS A320
aircraft, will take delivery of the first four jets this year,
according to its website.

Piyasvasti said he has no desire to get into politics after
he steps down.